Entrepreneurial Framework Conditions

Author: Marius Kahlert, UTwente

Entrepreneurial Framework Conditions (EFC) determine the conditions of a country's ecosystem which enhance or hinder the creation of new businesses and therewith influence the economic growth of a nation. While being affected by the social, cultural and political context of a certain country, the EFCs have a direct impact on the entrepreneurial activities and entrepreneurial capacity. Therefore, these conditions are important factors in order to assess the business dynamics and the environment for new business creation.

On an annual basis, the Global Entrepreneurship Monitor (GEM) publishes a Global Report on its research on individual entrepreneurial activities, social values and personal attributes in order to assess the conditions of a large number of countries all over the world. The nine major EFCs are: (1) Entrepreneurial Finance, (2) Government Policy, (3) Government Entrepreneurship Programmes, (4) Entrepreneurship Education, (5) Research & Development Transfer, (6) Commercial & Legal Infrastructure, (7) Market openness, (8) Physical Infrastructure and (9) Cultural & Social Norms. Countries which are considered more developed, tend to have a higher EFC compared to less developed countries. While North American economies have the highest scores in nearly all EFCs, African economies tend to have the lowest scores. Hence, the GEM suggest that North American countries provide the best conditions for the creation of new businesses.

Source: Singer, S., Amoros, J. E., & Moska, D. (2015). Global Entrepreneurship Monitor 2014 Global Report.